Ducey's 'Education Budget,' Part 2: 17 Percent of Schools Will Get A Big Bonus (Hint: It Helps to Have Lots of Rich Kids)

Governor Ducey signed a new program into law, Results-based funding. It will give 17 percent of the state's schools a sizable chunk of change, enough to give their teachers a 5 to 10 percent raise and still have half the funding left over to put to other uses.

Before I begin, let me admit most of the numbers I'm using here are approximations, and I can't guarantee I'm 100 percent correct on the consequences of the new results-based funding, but I think I'm reasonably close. The problem is, I haven't read anything near a thorough analysis of the new funding scheme, so I'm venturing into new territory. Consider my analysis and my numbers a starting point for further discussion. Oh, and a word of warning. This post is going to get wonky in a hurry, so if you're not interested in lots of digging into the numbers and intricacies of results-based funding, run while you still can.

Results-based funding is a new spin on a proposal Governor Brewer tried to put into law a few years back, unsuccessfully. The basic idea is, the most "successful" schools—meaning those where their students are achieving at a high level—should be rewarded for their success by getting more money. That's contrary to what most industrialized countries do, which is to give money, mentoring and resources to underperforming schools to help them improve. But let's put that aside and see how the Arizona plan works.

Next school year, about 17 percent of all district and charter schools will get results-based funding, which will amount to either $225 or $400 per student. The other 83 percent won't get a penny. To put the funding into perspective, Prop. 123 gave all Arizona schools about $325 per student. True, that was less than what schools need (and less than the courts ordered), but it was still a significant amount of money. The results-based funding numbers are in the same general ballpark. The program will cost $37.6 million, which is a bit more than the $34 million the legislature saw fit to allot for statewide teacher raises, yet it will go to fewer than one-fifth of the schools.

Of the 17 percent of schools that make the cut, those with fewer than 60 percent of their students on free or reduced lunch will get $225 per student. Schools with more than 60 percent on free or reduced lunch will get $400 per student. The law states that half or more of the new funding will be used for teachers. Ducey says that's specifically for teacher raises, though the law opens the spending up for other teacher-related uses. But if half of the money—$112.50 or $200 per student, depending on the school—were spent on teacher raises, that would mean a raise of approximately $2,250 or $4,000, somewhere between 5 and 10 percent. Those schools would be instantly more attractive to teachers and would see their teacher shortages disappear. Teacher applications would start flooding in, allowing them to fill their classrooms with top applicants.

The law assures that schools with more low income students, those getting $400 per student, will be included in the program. The clever folks who wrote the bill make it look like they're including an equal number of schools in both the higher and lower income groups, but the way the money is allotted, nearly 25 percent of schools with students from higher income families, those with fewer than 60 percent of FRL students, will be included, compared to 10 percent of schools with more than 60 percent of FRL students. Here's how they created the disparity.

Results-based funding is based on the percentage of students who pass the math and language arts portions of the statewide AzMERIT exam. Schools with fewer than 60 percent of FRL students have to score in the top 10 percent of all schools. Schools with more than 60 percent of FRL students have to score in the top ten percent of all schools in the 60 percent-or-higher FRL range. That sounds fair, since it gives the lower income schools which tend to have lower AzMERIT passing rates a chance at the funding, and it sounds like it's equal. After all, both groups simply have to rank in the top 10 percent. But 10 percent of what? For the higher income schools, it's 10 percent of all schools. For the lower income schools, it's 10 percent of the lower income schools. The result is, close to 25 percent of the higher income schools will get the extra money, compared to 10 percent of the lower income schools.

To explain how this works. I have to take charter schools out of the mix, even though they're included in the results-based funding program. Since many charters don't use the FRL program, the state will have to use a different metric to decide whether each school fits in the higher or lower income category, and I don't know how that will be determined. However, just looking at district schools will show how the "10 percent of what?" situation works, and that will operate the same way for charters.

Using very approximate numbers, there are about 1800 district schools in Arizona. About 700 have fewer than 60 percent of students on FRL, and about 1100 have more than 60 percent on FRL. Out of those 700 higher income schools, 180, or 25 percent, are likely to get results-based funding, because to qualify, they have to be in the top 10 percent of all 1800 schools. But for the lower income schools, the top ten percent of their total number, 1100 schools, will be guaranteed funding. That comes to 110 schools—in other words, 10 percent.

I need to add that, though a significantly larger percentage of higher income schools will get the funds, they will only receive $225 per student, while the lower income schools will get $400 per student. In terms of total money allotted, the two groups are reasonably equal, with, very possibly, a bit more of the total going to the lower income schools.

Depending on how you view the situation, by the number of schools included or the amount each school receives, the funding can be seen as equitable or inequitable. But that rating system will only be used for the 2017-18 school year, the first year of the program. Beginning with the 2018-19 school year and into the future, the results-based funding will go exclusively to schools receiving a state grade of A, which is likely to cut down significantly on the numbers of schools with more than 60 percent of their students on FRL. The reason the law has a different way of ranking schools the first year is that state grades have been on hold since Arizona switched from the previous AIMS test to the current AzMERIT test, so currently there are no state grades to use. What won't change is the difference in the amount granted per student. It will still be $225 per student in higher income schools, $400 per student in lower income schools.

If the state grading system used with the AIMS test were still in effect, I would say that nearly all the results-based funding money would go to schools with higher income students. But the state has created a new, more complex system of determining the grades which should level the playing field a bit. How much more equitable the new state grading system will be across schools with different percentages of high and low income students remains to be seen, but my bet is that this first year of results-based funding will be a high point for money going to low income schools, and it will go downhill from there.

Here are some things you can go to the bank on with results-based funding. Every BASIS charter will get an extra $225 per student. So will nearly every Great Hearts charter school, a charter chain in the Phoenix area which also attracts high achieving students. A significant number of district schools in high rent areas, like Catalina Foothills, Vail, Scottsdale and Chandler, will get that $225 per student bump as well. The number of schools whose students are lower on the economic ladder getting the funding will decrease as their level of poverty increases. It will be the rare school with 85 percent or more students on FRL—in other words, the schools where students are in greatest need of educational enrichment and personal attention—that sees a penny of the funding.